HMRC Inheritance Tax: Customer Guide

Who pays the tax if inheritance tax is due on gifts?

If a person dies within seven years of making a gift, inheritance tax (or additional inheritance tax) may be payable. If it is payable on such gifts, the people liable are

• the transferee
• a nominee, a trustee, or a life tenant – any person who takes the asset (or a beneficial interest in possession in it) at any time after the transfer
• a person who receives a benefit from a discretionary trust – where property is transferred into trust, any person for whose benefit any of the asset or its income is used
• You will have a secondary liability for the inheritance tax (unless the charge arises under the settled property rules) if
• it has not been paid within 12 months after the end of the month in which the death occurs, or
• no-one else is liable for the inheritance tax or part of it because of the limitation of liability provisions, for example, if the tax on the value transferred exceeds the value of the asset actually received by the transferee.

More on gifts.